During the review period from February 24 to March 21, the Nepal Stock Exchange (NEPSE) index went up by 38.28 points (+3.47%) and closed at 1,140.60 points. Since the index dropped to a three-year low in the review period, fresh buyers at bargain prices lifted the market temporarily. Despite the growth in the index, the total turnover decreased by 22% in the review period and stood at Rs 4.3 billion only.
During the review period, contrary to previous revision period, all the sub-indices landed in the green zone. The Life Insurance sub-index (+5.66%) was the biggest gainer as share value of Nepal Life Insurance (+Rs 73) and Prime Life Insurance (+Rs 15) went up. The Finance sub-index (+4.48%) went up with increase in share value of Goodwill Finance (+Rs 6) and Gurkhas Finance (+Rs 13). Similarly, the Hydropower sub-index (+4.34%) rebounded as share value of Upper Tamakoshi (+Rs 18), Arun Kabeli (+Rs 21) and Sanima Hydropower (+Rs 10) surged. Likewise, the Commercial Bank sub-index (+4.33%) soared as share value of most major commercial banks went up mainly Standard Chartered Bank(+Rs 44) and Everest Bank (+Rs 46).
The Development Bank sub-index (+2.69%) also booked gains as share value of Kanchan Development Bank (+Rs 22) and Bhargav Development Bank (+Rs 16) went up. Non-Life Insurance sub-index (+1.98%) went up with the increase in share value of Rastriya Beema (+Rs 160) and NLG Insurance (+Rs 67). The Hotels sub-index (+1.51 %%) followed suit with increase in share value of Oriental Hotel (+Rs 22) and Taragaon Regency (+Rs 4).Likewise, Others sub-index (+1.24%) followed suit with increase in share value of Citizen Investment Trust (+Rs 155).The Manufacturing & Processing sub-index (+0.67%) gained marginally as share value of Himalayan Distillery (+Rs 28) went up. Similarly, the Microfinance sub-index (+0.57%) went up with increase in share value of Sana Kisan (+Rs 34) and Swabalamban Microfinance (+Rs 15).
News & Highlights
The Securities Board of Nepal (SEBON) has directed NEPSE to provide broker license to commercial banks and to enable them to create a subsidiary company for the purpose, change the system of circuit breaker to match international practices, create Investors Protection Fund for the protection of rights of investors, develop necessary technological requirements for making the OTC market operational and provide approval to Employees Provident Fund (EPF), Citizen Investment Trust (CIT), Social Security Fund (SSF) and stock traders to work as market maker or dealer.
SEBON has also directed CDS and Clearing Limited for the creation of Settlement Guarantee Fund to ensure necessary payments and to decrease the clearance period to T (Transaction) +1 day from previous T+3 days after the full implementation of online trading. Likewise, SEBON has also issued the much awaited Specialised Investment Fund Regulations 2075. The regulation paves the legal way for operation of various alternative investment fund such as Private Equity (PE), Venture Capital (VC) and hedge funds.
In the public issue front, Trisuli Jal Vidhyut Company issued Initial Public Offering (IPOs) of 3,705,000 units. This is the first scheme under the Citizen Hydropower Project introduced by the government, the company is jointly formed by Nepal Electricity Authority (NEA) and Nepal Telecom. Likewise, Mountain Hydropower Nepal Limited issued 1,816,110 units of shares to the general public, ICRA Nepal had assigned Grade 4 rating to the issue, indicating below average fundamentals. Also, Universal Power Company issued Initial Public Offering (IPO) of 9,327,410 units. The issue was assigned IPO Grade 4 by ICRA Nepal indicating average fundamentals. After the allotment, the current paid up capital will reach Rs 2.10 billion. Panchathar Power Company issued IPO of 962,500 units.The care rating agency, CARE Nepal, has assigned grade 4 rating to this issue, indicating below average fundamentals of the company.
The market showed some signs of improvement during the review period as investors were attracted by lower Price Earnings (PE) ratio of scrips of Banks and Financial Institutions (BFIs). Nonetheless, as short-term investors rushed to book profits, the market couldn’t sustain the anticipated growth. With signs of improvement in market interest rates, the market is likely to gain some positive momentum in the days ahead.
This is an analysis from beed management pvt. ltd. No expressed or implied warrant is made for usefulness or completeness of this information and no liability will be accepted for consequences of actions taken on the basis of this analysis.